Public Funding for Family Planning Reaches New Heights, Propelled By State Efforts to Expand Medicaid Eligibility

A quarter-century after suffering deep cuts in the first year of the Reagan administration, inflation-adjusted public funding for family planning finally surpassed the level reached in FY 1980. After a 12-year climb that began in FY 1994, the federal and state governments spent a total of $1.85 billion on family planning client services in FY 2006, according to a Guttmacher Institute report. Notably, however, the national rate of growth during the period masks disparate trends at the state level: While expenditures rose 63% in inflation-adjusted dollars nationally, spending decreased or stagnated among one-third of states.

This disparate trend in state funding can be seen in the growth of Medicaid financing. Medicaid expenditures account for all of the inflation-adjusted growth seen over the past dozen years. (Once a small portion of total expenditures, Medicaid has grown from 20% to 71% of total spending since FY 1980.) The growth in Medicaid, however, has not been universal, but has been driven by state-initiated Medicaid family planning expansions: Two-thirds of the national spending growth occurred in the 14 states that sought and received permission from the federal government to expand eligibility for family planning above their income cut-offs for Medicaid eligibility overall (see chart).

EXPENDITURES FUEL GROWTH

Growth in Medicaid family planning spending and
beneficiaries increased at much higher rates in those states with expanded eligibility.

Source: Guttmacher Institute, 2008.

Increases in Medicaid family planning dollars have resulted in increases in the number of clients served, which again exemplifies the importance of the state eligibility expansion programs. While the number of Medicaid family planning clients rose marginally in states without expansions, they rose dramatically in the 14 expansion states—by 60% over the first half of this decade (see chart). This trend should continue: Six additional states have initiated Medicaid expansions, and legislation is pending in Congress to allow states to implement an expansion without the time-consuming process of obtaining federal approval.

Although overshadowed by the growing importance of Medicaid, federal grants and state appropriations remain vital components of the national effort. The Title X national family planning program and state appropriations account for 12% and 13% of total spending, respectively. Unlike Medicaid, these funding sources are not tied to individual users or specific clinical services. In addition to direct services support, they provide critical infrastructure support to family planning provider agencies and buttress the delivery of services by funding essential activities such as outreach and education. As Medicaid continues to grow as a proportion of all spending, family planning providers increasingly will need these alternative sources of funding to fill out the basic package of services Medicaid will cover and to provide services to clients who are ineligible for Medicaid, such as new and undocumented immigrants. In addition, the Title X program effectively sets standards nationwide for all public provision of family planning services, helping to ensure that services are comprehensive, voluntary, confidential and affordable (related article, Spring 2007, page 13).

According to previous Guttmacher analyses, women and couples are able to avoid 1.3 million unplanned pregnancies each year—400,000 of them among teenagers—thanks to publicly funded family planning services. Without these services, the U.S. abortion rate would be 40% higher than it is today. Together, the patchwork of disparate funding sources comprises a critical safety net to fund needed family planning and related services to millions of individuals, low-income or otherwise, each year.